Goldman Sachs facing £250m lawsuit

Goldman Sachs' asset management arm is facing a multi-million pound lawsuit
over its handling of a €7bn (£5.6bn) pension fund at the height of the
financial crisis.

The writ could be filed at the High Court in London as early as today. It is expected to detail how the Goldman Sachs subsidiary invested the transport worker's pension funds in inappropriate assets, leading to substantial losses.

Dutch pension group Pensioenfonds Vervoer is preparing to sue Goldman Sachs Asset Management for up to £250m in a case that could throw more light on how the bank handled its customers' money in the run up to the crisis.

The writ could be filed at the High Court in London as early as today. It is expected to detail how the Goldman subsidiary invested the transport worker's pension funds in inappropriate assets, leading to substantial losses.

In 2008, the fund lost 14.1pc and, although the performance was not as bad as some rivals, it led to a review of Goldman's performance and the bank being replaced as Vervoer's main asset manager in 2010.

The decision to replace Goldman came three days after the US markets regulator, the Securities and Exchange Commission, filed fraud charges against the bank, relating to the Abacus debt-backed security investment. The charges led to a $550m settlement.

At the time, Vervoer said the decision to replace Goldman Sachs as the asset manager had nothing to do with the SEC action.

A spokesman for the asset manager said: "We acted prudently and complied with our mandate, fulfilling our obligations to our client. We have not yet seen a claim but believe one would be without merit based on the facts of the situation and we would certainly contest it."